In: Finance
2. Advanced Medical Technology is a new, rapidly growing firm that produces specialized medical instruments. They sell to hospitals and other surgical units, and a substantial portion of their sales are to foreign governments. Typical payable terms in the industry are payment with 30 days.
They recently reported the following financial information:
Sales $225,000
Cost of sales 180,000
Inventory 33,000
Accounts receivable 72,000
Accounts payable 30,000
# of Days per year 365
Compute the additional working capital financing period for Advanced Medical.
Comment on their working capital financing period. What actions might Advanced take to improve their situation?